OpenNet Nationwide Fibre Network Clarifies Contractual Relationship with KSC

Yesterday, I received this news from OpenNet about the update of our nationwide Next Generation Fibre Network completion date. According to them, 95% of Singapore premises are scheduled to complete by July 2012. However, this, in my opinion is not the biggest story in the press release.

Today, I read the news on this OpenNet and its KSC (Key Subcontractor is SingTel for this case) heading for arbitration. I realized that the PR is more like a clarification then an update on the status. Seems like relationship is on a rock right now.

OpenNet, SingTel headed for arbitration

Here is the Press Release

OpenNet’s Initial Rollout of Singapore’s Nationwide Fibre Network Close to Completion

Ninety percent coverage today due to Aggressive Rollout

Singapore, 8 May 2012 – OpenNet was awarded the tender in September 2008 to build Singapore’s next generation fibre network with construction beginning in earnest in early 2009. In three years OpenNet has rolled out fibre to over 90% of Singapore’s homes and businesses.

Aggressive Rollout

OpenNet is scheduled to complete its obligations to roll out fibre to 95% of all Singapore premises by July, 2012. Nowhere in the world has a ubiquitous nationwide fibre-to-the-premise network been rolled out as quickly as it has in Singapore.

The IDA’s original requirement as part of its tender process allowed the network to be completed by 2015.  OpenNet had offered and committed itself to complete the network by the middle of 2012.

Proactive Responses

OpenNet knew this commitment was aggressive. However we felt that a fast rollout was critical to market adoption and to preventing parts of the market having to wait over five years for fibre services. Activation of fibre services started progressively from September 2010.

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The rollout has not been without its challenges. OpenNet has experienced installation delays for non-residential customers and extended wait times for residential customers. OpenNet treats all such delays very seriously.

OpenNet has been working to increase its activation capacity to reduce waiting time. From the originally contracted 2,050 activation slots per week, the capacity was raised to 2,400 slots in August 2011. Additional capacity was also added to meet surges in demand that occurred quarterly especially during the IT shows.

OpenNet has been working with the IDA to further increase capacity. OpenNet discussed with IDA on a draft plan on 7 February 2012 to raise the activation capacity beyond 2,400 slots per week to meet industry demand. In addition, the extra slots to meet demand surges would continue to be provided. The proposal took into account both the demand run-rate for the different type of installations required and deploying a capacity level that is optimal and cost-effective. A review mechanism was included to allow for a more regular review and adjustment of capacity to market demands.

Discussions arose between the IDA and OpenNet over the need to establish dedicated capacities for the different types of work OpenNet and its Key Sub-contractor (KSC) Singapore Telecommunications Company (SingTel) believe are necessary to efficiently manage activation of fibre services.

Subsequent to these discussions, a formal proposal was made on 2 March 2012 and the IDA released the OpenNet’s revised Interconnection Offer (ICO) drafting for public comments on 18 April 2012.

OpenNet looks forward to completing the review process and raising its activation capacity in the near future.

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On the non-residential front, OpenNet has been actively engaging the building management of non-residential buildings to explain the benefits of the Next Generation Nationwide Broadband Network (Next Gen NBN) and securing access for OpenNet’s fibre.

The existing arrangement also allows service providers (QPs/RSPs) to undertake in-building wiring independent of OpenNet. So far, service providers have taken up a very limited number of such services. OpenNet is currently studying how it can encourage greater take-up in this segment.

Clarification on contractual relationship with KSC

There has been talk that OpenNet can or should simply engage more contractors to complete the fibre activation and installation work.

As with any commercial relationship, the details of OpenNet’s contracts are confidential. However we will provide the following clarification.

In order for OpenNet to complete the rollout in 3.5 years, OpenNet must rely on SingTel as its KSC for the construction of the fibre network and activating the fibre. OpenNet is pursuing all avenues in its work with its KSC to ensure we can jointly meet our rollout obligations and market demands.

Unfortunately, some aspects of OpenNet’s performance are affected by disputes with its KSC. OpenNet has initiated a dispute resolution process to seek resolution to the disputes.

Furthermore, there has been speculation that OpenNet has initiated a Judicial Review (JR) on the installation quota and ICO review. While OpenNet is not able to comment on the case as it is currently before the court, we wish to clarify that the JR is not about activation capacity, installation quota or the ICO review.

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Growing Demand for Fibre

Singaporeans are savvy early adopters of technology. While residential and non-residential services have only been available on the Next Gen NBN since September 2010, there are to-date over 133,000 active subscribers. In the month of March 2012 alone, OpenNet added over 14,000 subscribers to the Next Gen NBN.

OpenNet will continue to work closely with the IDA and all of its customers and stakeholders to continue to build Singapore’s Next Generation National Broadband Network into a world-class fibre network.

– ENDS –

About OpenNet Pte Ltd 

OpenNet is responsible for building, managing and operating the world’s first nationwide all-optical fibre platform, which is the key foundation of Singapore’s Next Gen NBN. Next Gen NBN is designed to be an ultra-high bandwidth, resilient and scalable state-of-the-art optical fibre network that is capable of delivering speeds of 1Gbps and above to homes, offices and premises around Singapore.

For more information about OpenNet, visit